Portugal published Law no. 4-C/2021, which transposes the Directive (EU) 2020/2020 from the 7th of December 2020, as regards temporary measures in relation to value added tax applicable to COVID-19 vaccines and in vitro diagnostic medical devices in response to the COVID-19 pandemic

The Law, published on the 17th of February and applicable from the following day, provides for a VAT exemption on the supply of medical devices for in-vitro diagnosis of COVID-19, vaccines against that disease, as well as to the provision of services related to these products.

The following transactions are now - and until the 31st of December 2021 - exempt from VAT:

  • Transmissions, intra-Community acquisitions and imports of medical devices for in-vitro diagnosis of the COVID-19 disease which are in compliance with the applicable requirements as set out in the applicable European legislation;
  • Transmissions, intra-Community acquisitions and imports of vaccines against COVID-19, authorised by the European Commission or by the national health authorities; and
  • Provision of services closely linked to the devices or vaccines referred to in the previous points.

It should be noted that, despite the exemption applicable to the transactions listed above, the Law establishes the possibility of deducting the tax borne on the products or services acquired, imported or used by the taxpayer for purposes of the exempt transfer of products or provision of services.

See the Decree-Law in full here: https://dre.pt/application/conteudo/157772254